Ping An's New Pitch for Blockchain: Shared Ledger, But Banks Keep Clients

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Ping An, the Chinese insurance giant that built the eTradeFinance blockchain, is modifying the platform to give its 12 participating banks more control over customer relationships.

Major banks that participate in the blockchain network include HSBC, Standard Chartered, BNP Paribas in Hong Kong, Bank of East Asia, and the Hong Kong branches of all four state-owned commercial banks in China.

"In my view, customers need money, and banks are the ones that hold this money. So eventually it's a seller's market. But the existing model has made it easier to launch the platform and to make it running steadily," he said.

Josh Kroeker, HSBC's blockchain lead for global commercial banking, told CoinDesk that it will be convenient in the future if customers can access eTradeConnect via banks' own platforms rather than "a standalone portal."

Similar competitive concerns among banks are why Ping An built eTradeFinance using zero-knowledge proofs, a technology that allows someone to prove that they have knowledge of a secret without revealing the secret itself.

Just as banks are naturally unwilling to let their customers go to the other side of the street, they are equally wary of disclosing their customers' information to their competitors on a shared ledger.

"No banks would want to entirely share the information. That's also why there is always a lot of talks about blockchain, but very few in actual practice," said Lu, who joined Ping An in July 2016 from IBM, where he was one of the creators of the Hyperledger Fabric blockchain.

That's because in Lu's view the model balances the goals of using a distributed ledger to boost efficiency with letting banks maintain their business secrets.

Because of the zero-proof knowledge algorithm, neither Ping An nor the banks will have a clear idea of the size or volume of transactions handled by others on the network.

Lu said OneConnect is now planning to launch a similar blockchain trade finance platform in mainland China for a consortium of small and medium-size banks early next year.

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